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China to Set Up WeChat, TikTok to Next U.S. Trade Talks

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US and Chinese negotiators are expected to explore progress in their trade deal in the next few days, with beijing attempting to broaden the agenda to include Washington ‘s recent censorship of firms such as TikTok and WeChat.

A virtual meeting is expected to take place as early as this week, although a date has not been set, according to people familiar with the arrangements for the talks who asked not to be identified. President Donald Trump ‘s Chief Economic Advisor on Tuesday downplayed fears that the phase one deal would fall apart.

Along with agricultural purchases and the dollar-yuan exchange rate, Chinese officials plan to enforce Trump’s prospective bans on transactions with both apps on national security grounds, the people said, but did not elaborate on what China intends to achieve by doing so.

About seven months after the White House signing ceremony ended the tariff war that had ravaged the global economy, Beijing ‘s promised purchases of U.S. goods remain well behind schedule. The coronavirus epidemic and the worsening of US-China ties with anything from cyber security to Hong Kong have made trade a rare area of cooperation.

GLOBAL INSIGHT: Including Step 1 Chinese Trade Agreement to Import Ignore

“The one region we ‘re involved in is trade,” said Larry Kudlow, director of the White House National Economic Council, at a White House press conference on Tuesday. “It’s all right now.”

At a briefing in Beijing on Wednesday, Foreign Minister Zhao Lijian said that China’s stance on phase one remains clear. TikTok, he said, “is just a forum for entertainment, fun, talent show and sharing for Americans and people around the world. This has nothing to do with national security.

In the U.S., Trump’s handling of China is seen as a political tool for Democrats seeking to overthrow him in November. It was three years ago this month that the Trump administration initiated an investigation into China’s treatment of U.S. intellectual property that would help shape the basis of a trade war that would lead to tariffs on some $500 billion of goods traded between the world’s largest economies.

Now, less than three months before Trump’s re-election campaign, his administration is trying to find a compromise between projecting flexibility and sticking to an agreement that fails to deliver on Beijing ‘s promises.

‘The farmers’

Scott Kennedy, a China specialist at The Center for Strategic and International Studies, told Bloomberg Television this week that “there’s no great thing that either Trump or Xi Jinping want to cancel the Phase 1 agreement amid a storm that now exists inside the U.S.-China partnership.”

“It’s about farmers for Trump, in one term-the sales that can be made to this election for the red states,” said Kennedy, referring to rural strongholds for Republicans. For Chinese President Xi, “this is about peace and preventing relationships from collapsing fully,” he said.

China aims at undermining an volatile dispute between ByteDance Ltd. and the U.S, which was seen by some of its tech champions. The new activities are encouraging a possible sale of the highly successful short video application to Microsoft Corp. Trump also forbid US transactions with the WeChat application of Tencent Holdings Ltd., which has over 1 billion users.

The executive orders of Trump, which will take effect in September, may have far more impact than the ongoing assault on Huaweï Technologies Co., a telecommunications hardware provider, because they aim to sever communications ties between the world’s largest economies. The United States claims that Chinese apps gathering U.S. citizens’ information pose a serious national security risk as the data is likely to be collected by the government.

Despite this year’s crash in world economies linked to the pandemic that Trump has consistently accused China, Pekin’s plan to buy more than $170 billion in U.S. goods this year by the end of June has been just a quarter away.

Kudlow lowered the deficit on Tuesday by saying that China “substantially” had boosted U.S. goods purchases.

In the second half of the year, China will have to buy approximately $130 billion to comply with the original terms of the agreement signed in January which offered a further $200 billion in U.S. goods and services to be purchased at the level of 2017 by the end of 2021.

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